Home Report: Online Ad Revenue Will Soon Surpass Print

Report: Online Ad Revenue Will Soon Surpass Print

We are all aware of the floundering print industry that has seen a steady decline in revenues over the last several years. Newspapers that once thrived on the cash-cows that were classifieds and print advertising have had their lunch eaten by the disruptive forces of Craigslist and online advertising, which have slowly chipped away at print ad sales. Soon, however, according to a report from PricewaterhouseCoopers (PwC), Internet advertising revenues will surpass those of print advertising to become the second largest segment of advertising in the U.S. behind television.

“Over the next five years digital technologies will progressively increase their impact across all segments of entertainment and media … It is clear that the consumer is firmly in the driving seat of these changes.”
– PricewaterhouseCoopers Report


reported by the Wall Street Journal

, The PwC report found that in 2009, online ad revenues continued to climb to $24.2 billion, while print ads fell 28.6% to $24.8 billion. Online ads are expected to rake in $34.4 billion by 2014, which means print ads should dip below their online counterparts in a matter of months. PwC’s figures for online revenues don’t include mobile advertisements, which they believe will nearly quadruple in the next four years from $414 million to $1.6 billion.

“Over the next five years digital technologies will progressively increase their impact across all segments of entertainment and media (E&M) as digital transformation continues to expand and escalate,” a press release from PwC said Tuesday. “The uncertain economic background has done nothing to slow the pace of change, which has been far quicker than predicted 12 months ago. It is clear that the consumer is firmly in the driving seat of these changes.”

According to the report, increased access to broadband has played a large role in helping boost online ad revenues. The Wall Street Journal reports that broadband penetration in the U.S. nearly doubled from 34% in 2005 to 64% in 2010 thanks partly to $7.2 billion in federal stimulus money put towards expanding broadband access. Additionally, PricewaterhouseCoopers expects that global consumer spending on Internet access will increase from $228 billion 2009 to $351 billion in 2014.

It was only a matter of time until online ad sales outpaced those of print, and once they do, they will only continue to gain momentum. Legacy media are driven by numbers and are slow to change their ways, and thus have not thrown their entire weight behind online initiatives. When the scales tip over to online advertising in the next year, those that have been reluctant to embrace new and online media will be forced to allocate additional resources to the winning market.

The ultimate demise of print media is still many years away, but it is pretty clear that ad revenues are slowly dropping away. It will take one of the predominant newspapers ceasing to print physical copies to set off the domino effect that will likely follow, but it is unlikely to happen any time soon. While newspaper ad revenues have been falling, they’ve been leveling out, and a balance between print and online is likely to exist for several years before print entirely fades away.

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